2/17/2012

German President Quits Amid Legal Probe in Blow to Merkel

German President Christian Wulff resigned amid the threat of a legal probe into corruption allegations, delivering a blow to Chancellor Angela Merkel that risks distracting her from the euro-region debt crisis.

Wulff is the second German president to quit in less than two years, forcing Merkel to find a fresh candidate with cross- party support for the largely ceremonial post. Merkel canceled a planned trip to Rome today where she was due to hold talks on the debt crisis with Italian Prime Minister Mario Monti.

“Developments in the past days and weeks have shown that this confidence and my ability to act are lastingly damaged,” Wulff told reporters at the presidential palace in Berlin today. “I have made mistakes but I have always been sincere,” acting correctly in office. He stepped down with immediate effect.

Wulff, 52, a former deputy leader of Merkel’s Christian Democratic Union party, was picked by the chancellor to replace the previous incumbent, Horst Koehler, after Koehler’s surprise resignation in May 2010. Wulff was elected by a special national assembly on June 30.

Merkel said she will consult in the coming days with opposition political leaders to try and indentify a successor candidate to put to the assembly. Other potential candidates mentioned in the German media include Labor Minister Ursula von der Leyen and Bundestag President Norbert Lammert.

Merkel’s Regret

Merkel said that she “deeply regrets” Wulff’s resignation, though respected the decision. The resignation shows “the strength of our rule of law that treats everybody equally, irrespective of position.”

Wulff’s term in office was mostly confined to representing Germany overseas until allegations relating to a private home loan during his time as state prime minister of Lower Saxony were aired in Germany’s best-selling Bild newspaper on Dec. 13, then followed up in Der Spiegel magazine. Within days, he was facing growing scrutiny of his financial affairs including vacations at the homes of business people and calls from the opposition to quit.

Prosecutors in Lower Saxony, which Wulff governed from 2003 to 2010, have now submitted a request to the lower house of parliament to have the president’s immunity lifted as they seek to start a formal investigation into allegations he accepted illicit favors. They want to open an official probe after finding “initial evidence to suppose” the acceptance of benefits, the prosecutor’s office in the state capital of Hanover said in a statement on its website today.

“It’s a huge setback for Merkel,” Gerd Langguth, a Merkel biographer and political scientist at the University of Bonn, said in a phone interview. “No one could have imagined the extent of this. No one could have imagined that this would take on such dimensions.”

Prosecutors have been looking into whether they need to question Wulff over payments by businessman David Gronewold in connection with a vacation on the German island of Sylt in 2007.

Last month, an office in the president’s Berlin residence was searched by prosecutors as part of a separate investigation of his former spokesman, Olaf Glaeseker. The workplace was raided because Glaeseker had left private material there that the president’s office couldn’t hand over.

Porsche Takeover Bid

German financial regulator Bafin is meanwhile reviewing whether Wulff violated capital market rules in the wake of Porsche SE’s failed bid to take over Volkswagen AG, Der Spiegel reported today. Wulff may have learned in February 2008 that Porsche was planning the bid and Bafin is reviewing whether he may have had to disclose that fact to the markets, the magazine reported, without saying where it got the information. As the prime minister of Volkswagen’s home state of Lower Saxony, he was a member of the carmaker’s supervisory board at the time.

Merkel is now forced to devote her attention to lobbying for support for a fresh candidate among the 1,240-member Federal Assembly of lawmakers and state delegates that elects the president, having lost ground after regional election defeats throughout 2011 that she and other party officials blamed on the crisis.

The chancellor may struggle to push through a favored candidate compared with June 2010, when it unexpectedly took three votes in the Federal Assembly to elect Wulff. The chancellor’s majority in the assembly has since narrowed to as little as two seats from 21 seats at the last vote, according to electoral website wahlrecht.de.

Opposition Candidate

What’s more, the main opposition Social Democrats and Greens have indicated that they want to revive the candidacy of Joachim Gauck, a Protestant pastor and former East German dissident whom Wulff defeated for the presidency only at the third ballot. Polls at the time showed Gauck to be the more popular candidate among the general public.

“If she picks a recognized personality she will survive this without damage,” Langguth said. “The question is what possibilities she has to replace” Wulff. “The majority in the Federal Assembly is extremely tight.”

Unit the assembly is convened, Bavarian Premier Horst Seehofer, who holds the rotating chair of the upper house of parliament, the Bundesrat, will serve as interim president. Seehofer also leads Merkel’s Christian Social Union ally, one of three coalition parties together with her CDU and the Free Democratic Party.